STV Group Plc (the former Scottish Television) which broadcasts to the 5.5mn population of the United Kingdom’s northern-most country, this week acquired theUK unscripted production network Greenbird Media for initial cash consideration of £21.4m. Greenbird’s portfolio includes majority stakes in leading unscripted companies Crackit Productions and Tuesday’s Child, as well as minority positions in 13 other producers, bringing “immediate scale and earnings enhancement (and) the potential for future growth through consolidation of minorities”.
The deal takes STV beyond its diversification target of 50% of earnings from outside traditional linear broadcasting by the end of 2023, with an estimated out-turn of at least 60%.
STV CEO Simon Pitts said: “Growing STV Studios into the UK’s #1 (non-London) production company is one of our core strategic objectives. This transformative acquisition represents a major step towards that goal, adding significant scale and creative firepower to the group and immediately accelerating STV’s overall diversification in terms of both revenue and profit.”
In 2022, STV generated a record £138mn revenue and £26mn operating profit, with doubled production revenues in the previous three years. While STV has net cash, it has a historic pension deficit equivalent to about two-thirds of its £107mn market cap. STV’s audience performance – better than the commercial TV channels in most other areas of the UK – reflects not only the company’s creative success but also Scotland’s growing sense of national identity. Possible independence remains a political hot topic both there and in the rest of the UK.
The STV deal comes as the £2.7bn ITV – Britain’s largest commercial TV network – is “actively exploring the possible acquisition” of production company All3Media from Warner Bros Discovery (WBD) and Liberty Global (itself the 10% and largest shareholder in ITV). The possible deal could be valued at more than £1bn. While WBD seems set to sell its All3Media shareholding, Liberty might retain a stake in a merged ITV Studios-All3 business.
We might also expect such a complex structure to revive speculation over whether Liberty Global (owner of Virgin Media and broadband / mobile networks across Europe) will seek to acquire ITV itself.
